SevernTrent water have allegedy created several subsidiaries which then
buy bits of each other using IOUs worth billions, thus inflating the
value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the shareholders happy, but the money will run out eventually if they keep paying out
1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
SevernTrent water have allegedy created several subsidiaries which then
buy bits of each other using IOUs worth billions, thus inflating the
value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the shareholders happy, but the money will run out eventually if they keep paying out
1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
mike
On 09/12/2024 23:56, miked wrote:
SevernTrent water have allegedy created several subsidiaries which then
buy bits of each other using IOUs worth billions, thus inflating the
value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the shareholders
happy, but the money will run out eventually if they keep paying out
1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
mike
Shouldn't the Regulator be clamping down on such activities?
On 09/12/2024 23:56, miked wrote:
SevernTrent water have allegedy created several subsidiaries which then
buy bits of each other using IOUs worth billions, thus inflating the
value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the shareholders
happy, but the money will run out eventually if they keep paying out
1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
mike
Shouldn't the Regulator be clamping down on such activities?
On Tue, 10 Dec 2024 10:21:30 +0000, David wrote:
On 09/12/2024 23:56, miked wrote:
SevernTrent water have allegedy created several subsidiaries which then
buy bits of each other using IOUs worth billions, thus inflating the
value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the shareholders
happy, but the money will run out eventually if they keep paying out
1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
mike
Shouldn't the Regulator be clamping down on such activities?
Personally, I think auditors of multi-billion companies ought to be more
like OFSTED: appointed and paid for through the regulator. Appointing
and paying for your own auditors is too much like marking your own
homework to me.
Nick
On 09/12/2024 23:56, miked wrote:
SevernTrent water have allegedy created several subsidiaries which then
buy bits of each other using IOUs worth billions, thus inflating the
value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the shareholders
happy, but the money will run out eventually if they keep paying out
1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
It is called creative accounting.
I'm not sure why this particular trick is actually legal under UK law
but I expect they have been very well advised. Anyone here know?
SFO couldn't fight their way out of a paper bag so there is really no
chance of anyone being convicted for fraud or false accounting over it.
Larger corporations and their supine auditors know this. It makes me
question the usefulness of Big 5 "audited accounts" when they can hide
such fudge factors in plain sight and get away with it.
On 09/12/2024 23:56, miked wrote:
SevernTrent water have allegedy created several subsidiaries which then
buy bits of each other using IOUs worth billions, thus inflating the
value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the shareholders
happy, but the money will run out eventually if they keep paying out
1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
It is called creative accounting.
I'm not sure why this particular trick is actually legal under UK law
but I expect they have been very well advised. Anyone here know?
SFO couldn't fight their way out of a paper bag so there is really no
chance of anyone being convicted for fraud or false accounting over it.
Larger corporations and their supine auditors know this. It makes me
question the usefulness of Big 5 "audited accounts" when they can hide
such fudge factors in plain sight and get away with it.
On Tue, 10 Dec 2024 09:18:07 +0000, Martin Brown
<'''newspam'''@nonad.co.uk> wrote:
On 09/12/2024 23:56, miked wrote:Any good auditors/accountants will ask their clients "what do you want
SevernTrent water have allegedy created several subsidiaries which
then buy bits of each other using IOUs worth billions, thus inflating
the value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the
shareholders happy, but the money will run out eventually if they keep
paying out 1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
It is called creative accounting.
I'm not sure why this particular trick is actually legal under UK law
but I expect they have been very well advised. Anyone here know?
SFO couldn't fight their way out of a paper bag so there is really no >>chance of anyone being convicted for fraud or false accounting over it.
Larger corporations and their supine auditors know this. It makes me >>question the usefulness of Big 5 "audited accounts" when they can hide
such fudge factors in plain sight and get away with it.
your profits/losses/assets to be" and then apply their skills to making
it so.
On Thu, 12 Dec 2024 12:23:21 +0000, AnthonyL wrote:
On Tue, 10 Dec 2024 09:18:07 +0000, Martin Brown
<'''newspam'''@nonad.co.uk> wrote:
On 09/12/2024 23:56, miked wrote:Any good auditors/accountants will ask their clients "what do you want
SevernTrent water have allegedy created several subsidiaries which
then buy bits of each other using IOUs worth billions, thus inflating
the value of the company while real money is being paid in dividends.
Is this a common practice? I just wonder if ST are doing it, why not
other companies if the law allows it? Clearly it keeps the
shareholders happy, but the money will run out eventually if they keep >>>> paying out 1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
It is called creative accounting.
I'm not sure why this particular trick is actually legal under UK law
but I expect they have been very well advised. Anyone here know?
SFO couldn't fight their way out of a paper bag so there is really no
chance of anyone being convicted for fraud or false accounting over it.
Larger corporations and their supine auditors know this. It makes me
question the usefulness of Big 5 "audited accounts" when they can hide
such fudge factors in plain sight and get away with it.
your profits/losses/assets to be" and then apply their skills to making
it so.
Indeed. My Dads accountant for years ensured that his company made no
profit, regardless of turnover. This was often achieved by investing in
plant or employees. Thu keeping the money in the business. In latter
years it was helped by the increases in business rates, water rates, insurance and utilities as we as government requirements for documented
waste disposal and (post BCCI) a full audit every year.
(That's before the £3k spent on a tax investigation that revealed fuck
all of fuck all. Apparently you can't recoup your costs on that).
On 12/12/2024 14:32, Jethro_uk wrote:
On Thu, 12 Dec 2024 12:23:21 +0000, AnthonyL wrote:
On Tue, 10 Dec 2024 09:18:07 +0000, Martin Brown
<'''newspam'''@nonad.co.uk> wrote:
On 09/12/2024 23:56, miked wrote:Any good auditors/accountants will ask their clients "what do you want
SevernTrent water have allegedy created several subsidiaries which
then buy bits of each other using IOUs worth billions, thus
inflating the value of the company while real money is being paid in >>>>> dividends.
Is this a common practice? I just wonder if ST are doing it, why not >>>>> other companies if the law allows it? Clearly it keeps the
shareholders happy, but the money will run out eventually if they
keep paying out 1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
It is called creative accounting.
I'm not sure why this particular trick is actually legal under UK law
but I expect they have been very well advised. Anyone here know?
SFO couldn't fight their way out of a paper bag so there is really no
chance of anyone being convicted for fraud or false accounting over
it.
Larger corporations and their supine auditors know this. It makes me
question the usefulness of Big 5 "audited accounts" when they can
hide such fudge factors in plain sight and get away with it.
your profits/losses/assets to be" and then apply their skills to
making it so.
Indeed. My Dads accountant for years ensured that his company made no
profit, regardless of turnover. This was often achieved by investing in
plant or employees. Thu keeping the money in the business. In latter
years it was helped by the increases in business rates, water rates,
insurance and utilities as we as government requirements for documented
waste disposal and (post BCCI) a full audit every year.
(That's before the £3k spent on a tax investigation that revealed fuck
all of fuck all. Apparently you can't recoup your costs on that).
How was that money spent? Why not simply handover boxes of paperwork?
Indeed. My Dads accountant for years ensured that his company made no
profit, regardless of turnover. This was often achieved by investing in
plant or employees. Thu keeping the money in the business. In latter
years it was helped by the increases in business rates, water rates, insurance and utilities as we as government requirements for documented
waste disposal and (post BCCI) a full audit every year.
Jethro_uk <jethro_uk@hotmailbin.com> wrote in news:vjes6m$25s5n$3@dont- email.me:
[quoted text muted]
That seems rather pointless and potentially counter productive. I assume
he made a living from this business and to do so I assume he paid
himself through salary<?> which is a rather tax inefficient way to get
money out of a company.
On Fri, 13 Dec 2024 11:14:58 +0000, Peter Walker wrote:
Jethro_uk <jethro_uk@hotmailbin.com> wrote in
news:vjes6m$25s5n$3@dont- email.me:
[quoted text muted]
Indeed. My Dads accountant for years ensured that his company made
no profit, regardless of turnover. This was often achieved by
investing in plant or employees. Thu keeping the money in the
business. In latter years it was helped by the increases in business
rates, water rates, insurance and utilities as we as government
requirements for documented waste disposal and (post BCCI) a full
audit every year.
That seems rather pointless and potentially counter productive. I
assume he made a living from this business and to do so I assume he
paid himself through salary<?> which is a rather tax inefficient way
to get money out of a company.
He owned the company, not worked for it. So any money extracted was
via dividends.
On Thu, 12 Dec 2024 16:31:13 +0000, Fredxx wrote:
On 12/12/2024 14:32, Jethro_uk wrote:
On Thu, 12 Dec 2024 12:23:21 +0000, AnthonyL wrote:
On Tue, 10 Dec 2024 09:18:07 +0000, Martin Brown
<'''newspam'''@nonad.co.uk> wrote:
On 09/12/2024 23:56, miked wrote:Any good auditors/accountants will ask their clients "what do you want >>>> your profits/losses/assets to be" and then apply their skills to
SevernTrent water have allegedy created several subsidiaries which >>>>>> then buy bits of each other using IOUs worth billions, thus
inflating the value of the company while real money is being paid in >>>>>> dividends.
Is this a common practice? I just wonder if ST are doing it, why not >>>>>> other companies if the law allows it? Clearly it keeps the
shareholders happy, but the money will run out eventually if they
keep paying out 1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
It is called creative accounting.
I'm not sure why this particular trick is actually legal under UK law >>>>> but I expect they have been very well advised. Anyone here know?
SFO couldn't fight their way out of a paper bag so there is really no >>>>> chance of anyone being convicted for fraud or false accounting over
it.
Larger corporations and their supine auditors know this. It makes me >>>>> question the usefulness of Big 5 "audited accounts" when they can
hide such fudge factors in plain sight and get away with it.
making it so.
Indeed. My Dads accountant for years ensured that his company made no
profit, regardless of turnover. This was often achieved by investing in
plant or employees. Thu keeping the money in the business. In latter
years it was helped by the increases in business rates, water rates,
insurance and utilities as we as government requirements for documented
waste disposal and (post BCCI) a full audit every year.
(That's before the £3k spent on a tax investigation that revealed fuck
all of fuck all. Apparently you can't recoup your costs on that).
How was that money spent? Why not simply handover boxes of paperwork?
Who to ?
On Fri, 13 Dec 2024 11:14:58 +0000, Peter Walker wrote:
Jethro_uk <jethro_uk@hotmailbin.com> wrote in news:vjes6m$25s5n$3@dont-
email.me:
[quoted text muted]
That seems rather pointless and potentially counter productive. I assume
he made a living from this business and to do so I assume he paid
himself through salary<?> which is a rather tax inefficient way to get
money out of a company.
He owned the company, not worked for it. So any money extracted was via dividends.
On 12/12/2024 17:11, Jethro_uk wrote:
On Thu, 12 Dec 2024 16:31:13 +0000, Fredxx wrote:
On 12/12/2024 14:32, Jethro_uk wrote:
On Thu, 12 Dec 2024 12:23:21 +0000, AnthonyL wrote:
On Tue, 10 Dec 2024 09:18:07 +0000, Martin Brown
<'''newspam'''@nonad.co.uk> wrote:
On 09/12/2024 23:56, miked wrote:Any good auditors/accountants will ask their clients "what do you
SevernTrent water have allegedy created several subsidiaries which >>>>>>> then buy bits of each other using IOUs worth billions, thus
inflating the value of the company while real money is being paid >>>>>>> in dividends.
Is this a common practice? I just wonder if ST are doing it, why >>>>>>> not other companies if the law allows it? Clearly it keeps the
shareholders happy, but the money will run out eventually if they >>>>>>> keep paying out 1.2bn.
https://www.bbc.co.uk/news/articles/cd75nqwdpj7o
It is called creative accounting.
I'm not sure why this particular trick is actually legal under UK
law but I expect they have been very well advised. Anyone here
know?
SFO couldn't fight their way out of a paper bag so there is really >>>>>> no chance of anyone being convicted for fraud or false accounting
over it.
Larger corporations and their supine auditors know this. It makes
me question the usefulness of Big 5 "audited accounts" when they
can hide such fudge factors in plain sight and get away with it.
want your profits/losses/assets to be" and then apply their skills
to making it so.
Indeed. My Dads accountant for years ensured that his company made no
profit, regardless of turnover. This was often achieved by investing
in plant or employees. Thu keeping the money in the business. In
latter years it was helped by the increases in business rates, water
rates, insurance and utilities as we as government requirements for
documented waste disposal and (post BCCI) a full audit every year.
(That's before the £3k spent on a tax investigation that revealed
fuck all of fuck all. Apparently you can't recoup your costs on
that).
How was that money spent? Why not simply handover boxes of paperwork?
Who to ?
Whoever is conducting the tax investigation? I assume HMRC?
On 13/12/2024 12:17, Jethro_uk wrote:
On Fri, 13 Dec 2024 11:14:58 +0000, Peter Walker wrote:
Jethro_uk <jethro_uk@hotmailbin.com> wrote in
news:vjes6m$25s5n$3@dont- email.me:
[quoted text muted]
That seems rather pointless and potentially counter productive. I
assume he made a living from this business and to do so I assume he
paid himself through salary<?> which is a rather tax inefficient way
to get money out of a company.
He owned the company, not worked for it. So any money extracted was via
dividends.
So a profit was made. But the dividend matched the profits after paying corporation tax leaving a balance sheet of £0.
That would be tricky as you wouldn't know how much dividend to give
until after the accounts were computed, which would normally be in the following tax year.
Dividend payments must be recorded and dated, so not the sort of thing
where you can lawfully backdate a payment.
BICBW
On Sat, 14 Dec 2024 14:54:09 +0000, Fredxx wrote:
On 13/12/2024 12:17, Jethro_uk wrote:
On Fri, 13 Dec 2024 11:14:58 +0000, Peter Walker wrote:
Jethro_uk <jethro_uk@hotmailbin.com> wrote in
news:vjes6m$25s5n$3@dont- email.me:
[quoted text muted]
That seems rather pointless and potentially counter productive. I
assume he made a living from this business and to do so I assume he
paid himself through salary<?> which is a rather tax inefficient
way to get money out of a company.
He owned the company, not worked for it. So any money extracted was
via dividends.
So a profit was made. But the dividend matched the profits after
paying corporation tax leaving a balance sheet of £0.
That would be tricky as you wouldn't know how much dividend to give
until after the accounts were computed, which would normally be in
the following tax year.
Dividend payments must be recorded and dated, so not the sort of
thing where you can lawfully backdate a payment.
BICBW
This was all last century. It seemed to work for 20 years, but I am
not inclined to chase up the accountant now. Even thinking of their
name might result in a bill ...
Jethro_uk <jethro_uk@hotmailbin.com> wrote in news:vjkf3v$25s5n$28@dont-email.me:
On Sat, 14 Dec 2024 14:54:09 +0000, Fredxx wrote:
On 13/12/2024 12:17, Jethro_uk wrote:
On Fri, 13 Dec 2024 11:14:58 +0000, Peter Walker wrote:
Jethro_uk <jethro_uk@hotmailbin.com> wrote in
news:vjes6m$25s5n$3@dont- email.me:
[quoted text muted]
That seems rather pointless and potentially counter productive. I
assume he made a living from this business and to do so I assume he
paid himself through salary<?> which is a rather tax inefficient
way to get money out of a company.
He owned the company, not worked for it. So any money extracted was
via dividends.
So a profit was made. But the dividend matched the profits after
paying corporation tax leaving a balance sheet of £0.
That would be tricky as you wouldn't know how much dividend to give
until after the accounts were computed, which would normally be in
the following tax year.
Dividend payments must be recorded and dated, so not the sort of
thing where you can lawfully backdate a payment.
BICBW
This was all last century. It seemed to work for 20 years, but I am
not inclined to chase up the accountant now. Even thinking of their
name might result in a bill ...
The zero profit story is simply not credible.
HMRC rules on dividends haven't changed in my working memory and are succinctly stated here:
https://www.gov.uk/running-a-limited-company/taking-money-out-of-a- limited-company
or https://preview.tinyurl.com/bdfx8hr5
<quote>
Dividends
A dividend is a payment a company can make to shareholders if it has made
a profit.
You cannot count dividends as business costs when you work out your Corporation Tax.
Your company must not pay out more in dividends than its available
profits from current and previous financial years.
</quote>
On 2024-12-14, Peter Walker <not@for.mail> wrote:
Jethro_uk <jethro_uk@hotmailbin.com> wrote in
news:vjkf3v$25s5n$28@dont-email.me:
On Sat, 14 Dec 2024 14:54:09 +0000, Fredxx wrote:
On 13/12/2024 12:17, Jethro_uk wrote:
On Fri, 13 Dec 2024 11:14:58 +0000, Peter Walker wrote:
Jethro_uk <jethro_uk@hotmailbin.com> wrote in
news:vjes6m$25s5n$3@dont- email.me:
[quoted text muted]
That seems rather pointless and potentially counter productive. I
assume he made a living from this business and to do so I assume he >>>>>> paid himself through salary<?> which is a rather tax inefficient
way to get money out of a company.
He owned the company, not worked for it. So any money extracted was
via dividends.
So a profit was made. But the dividend matched the profits after
paying corporation tax leaving a balance sheet of £0.
That would be tricky as you wouldn't know how much dividend to give
until after the accounts were computed, which would normally be in
the following tax year.
Dividend payments must be recorded and dated, so not the sort of
thing where you can lawfully backdate a payment.
BICBW
This was all last century. It seemed to work for 20 years, but I am
not inclined to chase up the accountant now. Even thinking of their
name might result in a bill ...
The zero profit story is simply not credible.
HMRC rules on dividends haven't changed in my working memory and are
succinctly stated here:
https://www.gov.uk/running-a-limited-company/taking-money-out-of-a-
limited-company
or https://preview.tinyurl.com/bdfx8hr5
<quote>
Dividends
A dividend is a payment a company can make to shareholders if it has made
a profit.
You cannot count dividends as business costs when you work out your
Corporation Tax.
Your company must not pay out more in dividends than its available
profits from current and previous financial years.
</quote>
And yet... Thames Water has somehow managed to continuously pay
enormous dividends totalling over £7 billion while simultaneously
increasing its debt by £14 billion.
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